Elon Musk, who hates advertising, says Tesla will try it

Elon Musk, CEO of Tesla, announced Tuesday that the Tesla will begin advertising for the first time in the firm’s history.

We will try some advertising and see how it goes,” Musk said when a shareholder asked a question at the company’s annual meeting in Austin, Texas, on Tuesday.

Musk and Tesla (TSLA) were enthusiastically praised by the audience. But none of his pledges, from teasing two new products he plans to launch next year to pledging to stay Tesla (TSLA)’s CEO for the foreseeable future, elicited the same enthusiastic response from the audience as his advertising choice.

I wasn’t aware that people wanted it that much,” he stated later in the show about advertising.

The decision shows a complete 180-degree flip for Tesla as well as Elon Musk. For years, the wealthy CEO has been saying that there is no need for Tesla to promote because demand for automobiles outstrips supply.

Tesla does not pay for advertising or endorsements.” Instead, we use that money to improve the product,” was his tweet in 2019.

Musk claimed in an interview with CNBC after the meeting that advertising was not something he was considering doing until he was questioned about it at the meeting.

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One thing that has changed for Tesla is increased competition from established automakers, all of whom have allocated a significant portion of their advertising budget to electric vehicles, even those that are not yet for sale.

The increased competition, combined with rising borrowing rates, has resulted in a series of price drops by Tesla this year. Tesla’s margins have been pressured as a result of these price decreases, despite the fact that it is still more lucrative than traditional automakers.

His Twitter purchase may have also influenced his opinion of the importance of advertising. Before Musk bought it, that platform generated more than 90% of its revenue through advertising. Since then, advertisers have abandoned Twitter.

It’s indeed ironic that Twitter is heavily reliant on advertising,” he remarked of his previous opinions on advertising and the challenges he now has in trying to entice advertisers back to Twitter. “I guess I should say, ‘Advertising is awesome, and everyone should do it.

Musk laughed at that remark.